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U.S. expected to become world's leading oil producer by 2017

By Elisabeth RosenthalNew York Times

Posted:
11/13/2012 12:01:00 AM MST

Updated:
11/13/2012 09:43:46 AM MST

The United States will overtake Saudi Arabia as the world's leading oil producer by about 2017 and will become a net oil exporter by 2030, according to a report released Monday by the International Energy Agency.

That increased oil production, combined with new U.S. policies to improve energy efficiency, means that the United States will become "all but self-sufficient" in meeting its energy needs in about two decades — a "dramatic reversal of the trend" in most developed countries, the report says.

"The foundations of the global energy systems are shifting," Fatih Birol, chief economist at the Paris-based organization, which produces the annual World Energy Outlook, said in an interview before the release.

The agency, which advises industrialized nations on energy issues, had previously predicted that Saudi Arabia would be the leading producer until 2035.

The report also predicted that global energy demand would grow by 35 to 46 percent between 2010 and 2035, depending on whether policies that have been proposed are put in place. Most of that growth will come from China, India and the Middle East, where the consuming class is growing rapidly.

The consequences are "potentially far reaching" for global energy markets and trade, the report said.

Birol noted, for example, that Middle Eastern oil once bound for the United States would probably be rerouted to China. U.S.-mined coal, facing declining demand in its home market, is already heading to Europe and China instead.

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There are several components of the sudden shift in the world's energy supply, but the prime mover is a resurgence of U.S. oil and gas production, particularly the unlocking of new reserves of oil and gas found in shale rock.

The widespread adoption of techniques such as hydraulic fracturing and horizontal drilling has made those reserves much more accessible.